The World Bank has highlighted the need for urgent and targeted policy measures to safeguard jobs and household incomes in Cambodia as the country faces multiple economic shocks, according to its latest Cambodia Economic Update released in June 2026.
The report notes that rising global fuel prices, driven in part by geopolitical tensions, have increased transport and production costs across the economy. These pressures are affecting businesses’ ability to maintain employment levels while also raising living costs for households.
At the same time, Cambodia is dealing with a slowdown in the property sector and declining remittances following the return of nearly one million migrant workers. Inflation rose to 5.8 percent in April 2026, with lower-income households disproportionately affected. The report estimates that a 10 percent rise in fuel prices could increase the national poverty rate by 1.4 percentage points.
Despite these challenges, the economy continues to show resilience. Foreign direct investment reached US$5.1 billion in 2025, supporting the creation of around 400,000 formal jobs. Export performance has also remained strong, with goods exports growing by 17.7 percent in early 2026. Economic growth is projected to moderate to 3.9 percent in 2026 before recovering to 4.9 percent in 2027.
The World Bank emphasized that Cambodia’s ability to withstand these shocks reflects underlying economic strength, but warned that sustained policy action is essential to protect livelihoods and maintain growth momentum. Officials stressed that investment in human capital, job creation, and productivity-enhancing reforms will be critical as the country approaches a key demographic transition period.
Policy recommendations outlined in the report include targeted cash transfers to vulnerable households instead of broad fuel subsidies, stronger domestic revenue mobilization to fund essential services, and measures to support agricultural productivity such as improved access to fertilizer and fuel-efficient farming practices.
The report also highlights the importance of long-term structural reforms to expand quality employment opportunities, increase female labor force participation, and align workforce development with regional job markets.
